The numbers: U.S. home builders started construction on homes at a seasonally-adjusted annual rate of roughly 1.64 million in January, representing a roughly 4% decrease from the previous month, the U.S. Census Bureau reported Thursday. Compared with January 2021, however, housing starts were up nearly 1%.
Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.9 million, up nearly 1% compared with December and and the pace recorded a year ago. In the Northeast, housing starts rose overall, but single-family starts fell by nearly 26%. Meanwhile, in the West, both total housing starts and single-family starts increased by upwards of 15%. Starts declined overall in both the Midwest and South.
The big picture: January’s drop in housing starts could reflect a number of headwinds for home builders. An uptick in COVID-19 cases due to the omicron variant and bad weather likely stalled the beginning of many housing projects. Supply-chain issues may also have played a factor, given that home builders still report long delays for needed materials.